Theresa May confirms Conservatives will offer cap on standard energy tariffs set by Ofgem

 
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British Gas Controversially Increases Its Energy Prices
British Gas would be one of the main companies affected by the cap (Source: Getty)

Prime Minister Theresa May has pledged the Conservative party will cap energy prices if it holds a majority after the election.

The Conservatives said they will cap standard energy tariffs, which will affect around 70 per cent of customers of the so-called Big Six energy firms.

The big energy firms have come under criticism from across the political spectrum for raising prices on their default tariffs.

Read more: Energy price freeze tops personal finance wishlist for British voters

Energy regulator Ofgem would set the level of the cap, the Conservatives said.

Greg Clark, secretary of state for business, energy and industrial strategy, said: “We will act on our commitment to intervene when the energy market fails to treat people in a fair and reasonable manner.”

Downing Street had previously been in talks with John Penrose, a backbench MP, over a similar “relative price cap”.

That plan would stop firms from sharply raising the prices paid by consumers on standard tariffs when their contracts come up for renewal.

The move was widely trailed over the past month, with some comparing the move to a policy announced by former Labour leader Ed Miliband before the 2015 General Election.

Read more: May to offer energy price cap, but will it hit competition?

Energy bosses previously slammed the move. Keith Anderson, chief corporate officer of Scottish Power, said a price cap will hurt customers in the long run by lowering competition in the sector.

Meanwhile Iain Conn, the boss of British Gas owner Centrica, said the intervention showed some in government “don’t believe in free markets”.

The move comes as May looks to assert her own brand of Conservatism, distinct from her predecessor David Cameron.

May has previously criticised firms in the sector whose price increases put financial pressure on “ordinary working families”.

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